Because he’s happy

Seasoned Opec watchers know that the more Saudi Arabia’s oil minister Ali Naimi has to say for himself ahead of a meeting, the more likely it is that nothing will happen during that meeting. Conversely, if Naimi stays schtum then it’s likely to be because there are more important conversations to be having than those with reporters.

On his arrival in Vienna yesterday, Naimi was happy to talk, pointing to rising global oil demand and tighter supply as signs that Opec’s Saudi-orchestrated policy of defending market share rather than price is bearing fruit. There is a broad expectation that Friday’s meeting will be short and to the point. Naimi’s chattiness seems to back that up.

Not only is he loquacious, Naimi also seems content. Gone, seemingly, are the days when a reporter would have the phrase “prices are good, the market is balanced” on a template for use during an Opec meeting. Yesterday, in the eye of the storm, Naimi reflected on crude storage and market structure. If there’s Opec karaoke, expect him to pick Pharrell Williams’ “Happy”.

But not everyone gathered at Opec HQ will join in with the chorus on that one — members such as Nigeria, Algeria and Venezuela are being pinched in a way that just isn’t being felt in Riyadh.

That’s because the effect of falling oil prices on the rest of Saudi Arabia’s economy is, so far, limited. So says the IMF, which sent a mission to the country last month. Sure, growth is expected to slow as government spending begins to adjust to the new lower oil price environment, but the IMF sees Saudi GDP growth at around 3pc for the medium term and inflation remaining subdued. How many developed economies would settle for that combination?

The IMF also said the ability of Riyadh to finance a deficit through debt is not in question — the time of $100/bl oil may be in the past, but it did allow Saudi Arabia and other Mideast Gulf Arab Opec producers to build up the massive financial reserves that should help to see them through the lower oil price period now.

This all adds up to a happy Ali Naimi. Who knows, maybe this time he’ll even talk nicely with television reporters.